Microsoft Says It Wants Patent Peace With Google’s Motorola

Microsoft Corp. (MSFT), embroiled in patent litigation with Google Inc. (GOOG)’s Motorola Mobility unit, said it’s open to reaching a comprehensive settlement of disputes that have limited sales of Motorola Mobility products in the U.S. and Germany.

“This particular litigation now stands at a crossroads,” Microsoft General Counsel Brad Smith and Horacio Gutierrez, head of Microsoft’s intellectual property group, said in a joint blog posting. “Google can take one of two paths: it can choose either to engage in serious discussions to search for patent peace or persevere in its diversionary tactics. We hope it will choose the first course, and we stand ready to engage in good faith if it does.”

Microsoft has won orders that banned U.S. imports of Motorola Mobility phones that use a patented feature to coordinate schedules between phones and personal computers. It’s also won limits on sales of some Motorola Mobility products in Germany based on other Microsoft patents.

Motorola Mobility, which Mountain View, California-based Google bought in May, said it too is willing to reach an agreement. It said Microsoft is the one that’s causing difficulties in ending the litigation.

“Microsoft wants to undercut Motorola’s industry-leading patent portfolio, licensed by more than 50 other companies on fair and reasonable terms, while seeking inflated royalties tied to standards that Microsoft alone controls,” Becki Leonard, a company spokeswoman, said in an e-mailed statement. “Motorola is always open to negotiations that avoid wasteful and abusive patent claims.”

Infringement Claims

Motorola Mobility has lodged its own patent-infringement claims against Microsoft, including cases in the U.S. and Germany targeting the Xbox video-gaming system and Windows operating system.

Motorola Mobility has submitted offers to license its patents, some of which relate to standards established by industry groups for video compression and Wi-Fi technology. It also has offered to take a license to the coordination feature, known as ActiveSync, that it has previously licensed from Microsoft before 2007.

Microsoft contends the offer doesn’t meet Motorola Mobility’s obligation to license such patents on fair and reasonable terms, and the licensing offer should be based on “market rates.” It filed a breach of contract suit that’s scheduled for trial in November in federal court in Seattle, near Microsoft’s headquarters in Redmond, Washington.

Licensing Agreements

Smith and Gutierrez said any agreement must cover all Microsoft patents, including ones the company claims Google’s Android operating system infringed. The software maker has reached licensing agreements with other companies that manufacture devices that run on Android, including Barnes & Noble Inc. (BKS) and Samsung Electronics Co.

The European Union is investigating claims filed by Microsoft and Apple Inc. (AAPL) that Motorola Mobility is misusing its patents. The U.S. Senate Judiciary Committee held a July 11 hearing on whether there should be limits placed on the use of standard-essential patents.

Microsoft and Apple contend that owners who help develop standards shouldn’t be allowed to use essential patents to block competitors. Google has told regulators it won’t seek any block as long as companies are in licensing negotiations. It has accused Microsoft and Apple of refusing to negotiate.

The U.S. International Trade Commission is considering whether such patents should be the basis of an import ban, in a case Motorola Mobility filed against Apple. A final decision in that case is due Aug. 24.

To contact the reporter on this story: Susan Decker in Washington at sdecker1@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net

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